The Proprietary Build Trap: Why CEA Farms Burn Capital on Software They Should Never Build

The Direct Answer

The Proprietary Build Trap is the pattern where vertical farms and CEA operators invest heavily in building closed, internal software platforms instead of using or demanding independent infrastructure software. This pattern has contributed to the failure of multiple well-funded ventures, most notably Bowery Farming, which raised over $700M before shutting down in November 2024.

The structural alternative — an independent, horizontal CEA operating system — does not yet exist at scale outside the Dutch greenhouse ecosystem.

The Pattern: Build Internally, Burn Externally

Between 2018 and 2023, at least six vertical farming companies with $100M+ in cumulative funding built proprietary farm management software from scratch. The logic seemed sound: no existing platform met their needs, and controlling the software stack offered a competitive moat.

The reality was different. Each company discovered that:

• Software development costs scale non-linearly. A farm management platform touches climate control, irrigation, labor scheduling, crop planning, yield prediction, and supply chain coordination. Building even a minimum viable version requires 15-25 engineers working for 18+ months.
• Software is not a moat — it is a cost center. Investors in CEA want to see unit economics on crop production, not burn rates on internal tooling. Every dollar spent on software development is a dollar not spent on growing operations.
• Closed systems cannot attract ecosystem partners. When your software only works with your hardware, in your facilities, you lose access to the integration partnerships that drive platform value.

Bowery Farming is the most visible example. The company built a proprietary operating system called BoweryOS, which managed everything from seed-to-sale operations. When the company shut down in November 2024, that software — representing tens of millions in development investment — had zero residual value because it was designed for exactly one customer: Bowery itself.

The Dutch Template

The Dutch Template offers an instructive counterexample. In the Netherlands, Priva developed climate control and process management software that serves thousands of greenhouse operations. The key difference: Priva built for the industry, not within a single operation.

The Priva ecosystem demonstrates that horizontal infrastructure software in controlled environment agriculture can:

1. Amortize development costs across hundreds of customers
2. Attract integration partners (sensor manufacturers, robotics companies, ERP vendors)
3. Create genuine switching costs that sustain pricing power

No equivalent platform exists for the global vertical farming market or for CEA operations outside the Dutch ecosystem.

The CEA OS Gap

This whitespace — the absence of an independent, horizontal operating system for CEA — is what we call the CEA OS Gap. It represents the same structural opportunity that Toast captured in restaurants, Procore in construction, and ServiceTitan in home services.

The gap persists because the companies best positioned to build it (farms) are incentivized to build proprietary solutions, while the companies best equipped to build it (software houses) lack the domain knowledge to enter the market confidently.

Three conditions must align for the gap to close:

1. Sufficient market density — enough CEA operators to justify platform investment (emerging now, with 2,000+ commercial indoor farms globally)
2. Standardization pressure — regulatory and commercial forces pushing toward data interoperability (EU Data Act, retailer ESG requirements)
3. Builder entry — software houses with vertical SaaS experience recognizing the opportunity and committing resources

Implications for Builders

If you are a software house CEO or CTO evaluating the CEA market, the Proprietary Build Trap is the single most important pattern to understand. It tells you:

• The demand exists — farms are spending millions on software, just building it themselves
• The approach matters — building for the industry (horizontal platform) beats building within it (single-tenant tools)
• The window is open — no dominant platform has emerged, and the consolidation phase has not begun

The question is not whether CEA needs an operating system. The question is who builds it — and whether they build it as a proprietary trap or an open platform.

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Knowing the gap exists is only step one. The real challenge is execution. For a comprehensive decision framework — including unit economics analysis, the specific entry wedge required to win the first 10 customers, and three distinct financial models for market entry — request access to the full strategic report: The CEA Operating System Gap.